Decades old income tax rules are going to change. Now you will not hear many such words which you have been hearing for years. The new income tax bill will get the approval of the Union Cabinet on 7 February i.e. today evening. Then Finance Minister Nirmala Sitharaman can present it in the Lok Sabha on 10 February. After that it will be sent to the Parliament’s standing committee related to finance. The standing committee will consider it extensively.

With the implementation of the new Income Tax Bill, the terminology of income tax rules will change. You will not hear many such words, which you have been hearing for a long time. For example, tax year will now be used instead of assessment year. Currently, assessment year and financial year are used a lot in income tax rules. Financial year means the financial year for which you pay tax. Assessment year means the financial year in which you pay tax. Many people get confused in understanding the meaning of assessment year and financial year.

The second big change that is going to come is that the government will not have to amend the Income Tax Act to change many provisions of income tax such as the amount of deduction or rebate. The government will be able to make such changes instead of an executive order. This means that the government will be able to take decisions to change deduction and rebate as per the need quickly. This also means that the government will not have to use the Union Budget to provide relief to taxpayers . Currently, the government announces changes in the income tax rules in the Union Budget.

Sources say that after the implementation of the new Income Tax Bill, many words from the British era, which have been in use for more than 60 years, will stop being used. There are many such English words in these, which make the whole sentence cumbersome. Apart from this, the language used in the Income Tax rules is quite complex. Very complex words and methods are used to say things. Due to this, these rules and provisions are not understood by the common man. Due to this, the common people are not interested in understanding these rules.

Finance Secretary Tuhin Kant Pandey has already hinted about this. He said on February 6 that the use of long sentences has been avoided in the new Income Tax Bill. It is believed that the simplified language of income tax rules will increase the interest of taxpayers in them. This will also increase compliance. There will be a reduction in cases of tax disputes. This will increase the government’s revenue. According to government data, the number of disputed income tax cases is currently more than 2 crore. About 31 lakh crore rupees are stuck in these.

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Reuters has given this report citing two government sources. However, the Finance Ministry did not respond to an email sent by Reuters in this matter. It has been told in the report that this time the limit of income tax exemption can be increased from 2.5 lakh to 5 lakh.

At the same time, many people are also saying that the income tax rates and slabs which were applicable in the assessment year 2022-23, can remain applicable in the new assessment year (AY 2023-24) as well. Let us tell you that Finance Minister Nirmala Sitharaman will present the budget on 1 February 2023.

Income up to 2.5 lakh is tax free.

If the income tax limit is increased by changing the income tax slab, then the maximum benefit will be to the employed people and small businessmen. Currently, no tax is payable on income up to Rs 2.5 lakh. Income up to Rs 3 lakh for persons in the age group of 60-80 years and Rs 5 lakh for senior citizens above 80 years of age is tax free.

Tax exemption limit may be 5 lakhs

According to media reports, this time the limit of 2.5 lakhs can be increased to 5 lakhs. If this happens, then you will not have to pay any income tax if your annual income is up to 5 lakhs. Apart from this, it is necessary to file ITR for those earning more than 2.50 lakhs. After this this limit will be 5 lakhs.

There has been no change in the income tax slab for the last 9 years. The last time in the year 2014, the government increased the income tax exemption limit. This change was the first general budget of the first term of the Narendra Modi government. Now in the year 2023, Finance Minister Nirmala Sitharaman will present the last full budget of the second term of the Modi government. The Finance Minister can present the Union Budget on February 1, 2023.

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